Privatization Opportunities for State Parks, Resorts and Golf - - PowerPoint PPT Presentation

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Privatization Opportunities for State Parks, Resorts and Golf

Jonathan Small, CPA Fiscal Policy Director Oklahoma Council of Public Affairs, Inc.

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Mission

“OCPA's mission is to accumulate, evaluate, and disseminate public policy ideas and information for Oklahoma consistent with the principles of free enterprise, limited government, and individual initiative.”

How does OCPA evaluate government activities?

• Does it promote free enterprise?
• Does it promote limited government?
• Does it promote individual initiative?
• Is it a core function of government?
• Is it transparent?
• How is it performing?

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Privatization - Does it promote free enterprise?

• Utilizes the existing resources in the private

sector to perform state services

• Through use of a competitive bidding process,

most suitable private sector provider is chosen

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Privatization - Does it promote limited government?

• Protects against “crowd out” of the private

sector by the public sector

• Relies on the private sector to provide services,

thus pointing citizens to existing non-government solutions

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Privatization - Does it promote individual initiative?

• Allows citizens to utilize their industry to provide

services on behalf of the government

• Fosters the innovative ideas and results of

individuals and their private businesses competing to provide the best government services

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Privatization – Is it a core function of government?

• Government services should have the goal to

promote freedom and individual initiative

• By its very nature, privatization taps the

innovation of individuals, and promotes the existing solutions for proposed services, thus is a core function and foundation on which most government services should be based

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Privatization – Is it transparent?

• Through use of an open competitive bid process

such as provided by the competitive bidding act, and with thoughtful contract construction, transparency is possible

• Services are provided direct to the public, so

anyone utilizing those services can provide feedback on their experience

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Privatization – How is it performing?

• Department of Transportation – engineering,

construction contracts

• Insurance Department – licensing, education
• Higher Education – book stores, concessions
• Department of Corrections – private prisons,

“half-way” houses

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Privatization – How is it performing?

• Tourism Department – targeted concessions,

production of magazines, park maintenance, lodging, etc

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Privatization – Opportunities

• “Whole Park” concessions

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“Whole Park” – How it works

• Commercial Lease
• Park run for profit be lessee
• Public entity paid rent in the form of a

percentage of fee revenues

• Private company, according to contract pays all
• peration and maintenance costs

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“Whole Park” – How it works

• Just like leasing mall space, private company

must meet contractual guidelines

• Guidelines for caretaking of area
• Park available to public as dictated by public

entity

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“Whole Park” – Advantages

• Public retains ownership, oversight and contract

enforcement

• Concessionaire assumes operations and

maintenance; pays state an annual share of park revenues (3-15%)

• Marketing leverage

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“Whole Park” – Advantages

• Concessionaire can “bundle” parks to ensure

facilities remain open and immune from budget wrangling and uncertainty

• Minimize taxpayer liability and preserve natural

treasures

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“Whole Park” – Advantages

• Revenue Risk Transfer
• Demand Risk Transfer
• Appropriation Risk Transfer
• Operational Risk Transfer
• Legal/Liability Risk Transfer

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Example - US Forestry Service

• Private park management for over 30 years
• Over half of USFS recreation areas privately

managed, approx. 80-90% by visitation

• Despite drastic reductions in USFS revenue,

recreation areas remain open

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Private Sector Examples

• Recreation Resource Management operates
• ver 175 sites in 11 states for federal, state and

local authorities

• Over 19 of operated sites ranked within the top

100 family campgrounds in the US

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Conclusion

• “Whole Park” concessions should be

considered for all state parks, resorts & golf courses, and pursued for chronic financially underperforming state parks, resorts & golf courses

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Sources

• Reason Foundation – Len Gilroy and Harris

Kenny

• www.parkprivatization.com
• Recreation Resource Management

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Thank You!

Q & A

Jonathan Small, CPA jonathan@ocpathink.org (405) 602-1667